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Previous: PACKAGING CORP OF AMERICA, 10-Q, EX-27.1, 2000-11-13 |
Next: PALMETTO REAL ESTATE TRUST, 10QSB, EX-27, 2000-11-13 |
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR TRANSITION PERIOD FROM TO .
Commission file number 0-179
PALMETTO REAL ESTATE TRUST
(Exact name of small business issuer as specified in its charter)
| South Carolina | 57-0405064 |
| (State or other jurisdiction of incorporation of organization) |
(I.R.S. Employer Identification No.) |
| 45 Liberty Lane Greenville, SC |
29607 |
| (Address of principal executive offices) |
(Zip Code) |
Issuer's telephone number, including area code: (864) 233-6007
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) or the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
The number of shares outstanding of the Issuer's Shares of $1 Beneficial Interest as of September 30, 2000 was 1,770,006.
Transitional Small Business Disclosure Format:
Yes [ ] No [ X ]
PAGE
PALMETTO REAL ESTATE TRUST
Quarterly Report on Form 10-QSB
For the Quarterly Period Ended September 30, 2000
Form 10-QSB Index
| Part I. | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements | |
| Unaudited Balance Sheet at September 30, 2000 | . . . . . . . . 1 | |
| Unaudited Statements of Income and Undistributed Earnings for the Three Months and Nine Months Ended September 30, 2000 and 1999 |
. . . . . . . . 2 | |
| Unaudited Statements of Cash Flows for the Nine Months Ended September 30, 2000 and 1999 |
. . . . . . . . 3 | |
| Notes to Unaudited Financial Statements | . . . . . . . . 4 | |
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
. . . . . . . . 5 |
| Part II. | OTHER INFORMATION | |
| Item 1. | Legal Proceedings | . . . . . . . . 6 |
| Item 2. | Changes in Securities | . . . . . . . . 6 |
| Item 3. | Defaults Upon Senior Securities | . . . . . . . . 6 |
| Item 4. | Submission of Matters to a Vote of Security Holders | . . . . . . . . 6 |
| Item 5. | Other Information | . . . . . . . . 6 |
| Item 6. | Exhibits and Reports on Form 8-K | . . . . . . . . 6 |
| Signatures | . . . . . . . . 7 |
PAGE
PALMETTO REAL ESTATE TRUST
Balance Sheet
(unaudited)
September 30, 2000
Assets
| Real estate investments, at cost: | |
| Rental property, net of accumulated depreciation | $ 9,490,438 |
| Timberlands | 24,864 |
| Total real estate investments | 9,515,302 |
| Other assets: | |
| Cash | 335,280 |
| Rent receivable | 5,717 |
| Note receivable | 190,522 |
| Deferred loan expense, net of accumulated amortization | 19,996 |
| Total other assets | 551,515 |
| Total assets | $10,066,817 |
Liabilities and Shareholders' Equity
| Liabilities: | |
| Mortgage notes payable | $ 6,694,500 |
| Accounts payable and accrued expenses | 146,335 |
| Income taxes payable | 3,000 |
| Total Liabilities | 6,843,835 |
| Shareholders' equity: | |
| Shares of beneficial interest, $1 stated value; 5,000,000 shares authorized; 1,770,006 shares issued and outstanding |
1,770,006 |
| Capital surplus | 498,734 |
| Undistributed earnings | 954,242 |
| Total shareholders' equity | 3,222,982 |
| Total liabilities and shareholders' equity | $10,066,817 |
PAGE
PALMETTO REAL ESTATE TRUST
Statements of Income and Undistributed Earnings
(Unaudited)
For the Three Months and Nine Months Ended September 30, 2000 and 1999
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2000 | 1999 | 2000 | 1999 | |
| Income: | ||||
| Rental income | $ 480,595 | $ 461,750 | $ 1,445,837 | $ 1,345,352 |
| Other income | 10,783 | 5,627 | 21,148 | 15,429 |
| Total income | 491,378 | 467,377 | 1,466,985 | 1,360,781 |
| Expenses: | ||||
| Depreciation and amortization | 76,664 | 70,725 | 229,685 | 212,177 |
| Interest | 114,860 | 129,415 | 385,192 | 355,797 |
| Repairs and maintenance | 23,418 | 18,404 | 48,580 | 52,603 |
| Property taxes | 47,904 | 45,422 | 133,104 | 136,266 |
| General and administrative | 33,552 | 39,974 | 118,220 | 141,041 |
| Total expenses | 296,398 | 303,940 | 914,781 | 897,884 |
| Income from operations before income taxes |
194,980 | 163,437 | 552,204 | 462,897 |
| Gain on sale of real estate | - | 2,344 | 137,933 | 7,031 |
| Income before income taxes | 194,980 | 165,781 | 690,137 | 469,928 |
| Income tax expense | (1,000) | (1,000) | (3,000) | (3,000) |
| Net income | 193,980 | 164,781 | 687,137 | 466,928 |
| Undistributed earnings, beginning |
866,367 | 701,077 | 479,593 | 487,437 |
| Dividends paid | 106,105 | 106,201 | 212,488 | 194,708 |
| Undistributed earnings, ending |
$ 954,242 | $ 759,657 | $ 954,242 | $ 759,657 |
| Basic earnings per share of beneficial interest |
$ .11 | $ .09 | $ .39 | $ .26 |
PAGE
PALMETTO REAL ESTATE TRUST
Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 1999
| Nine Months Ended | ||
| September 30, | ||
| 2000 | 1999 | |
| (unaudited) | ||
| Cash flows from operating activities: | ||
| Net income | $ 687,137 | $ 466,928 |
| Adjustments to reconcile net income to net cash provided by operating activities: |
||
| Depreciation | 224,882 | 208,622 |
| Amortization of deferred expenses | 4,803 | 3,555 |
| Gain on sale of real estate | (137,933) | (7,031) |
| (Increase) decrease in: | ||
| Rent receivable | 729 | 24,790 |
| Increase (decrease) in: | ||
| Accounts payable and accrued expenses | 265 | 14,270 |
| Income taxes payable | 3,000 | 3,000 |
| Net cash provided by operating activities | 782,883 | 714,134 |
| Cash flows from investing activities: | ||
| Property additions and improvements | (25,403) | (5,130) |
| Collections of mortgage note receivable | 11,181 | 10,222 |
| Net cash provided by investing activities | (14,222) | 5,092 |
| Cash flows from financing activities | ||
| Payments on mortgage notes and demand note payable | (193,500) | (177,500) |
| Payment of dividends | (509,570) | (411,534) |
| Net cash used in financing activities | (703,070) | (589,034) |
| Increase in cash | 65,591 | 130,192 |
| Cash at beginning of period | 269,689 | 300,878 |
| Cash at end of period | $ 335,280 | $ 431,070 |
PAGE
PALMETTO REAL ESTATE TRUST
Notes to Interim Financial Statements
September 30, 2000
(1) Basis of Presentation
The accompanying unaudited financial statements, which are for
interim periods, do not include all disclosures provided in the
annual financial statements. These unaudited interim financial
statements should be read in conjunction with the financial
statements and the footnotes thereto contained in the Annual
Report on Form 10-KSB for the year ended December 31, 1999 of
Palmetto Real Estate Trust (the "Trust"), as filed with the
Securities and Exchange Commission.
(2) Interim Periods
In the opinion of the Trust, the accompanying unaudited interim
financial statements contain all adjustments (which are of a normal
recurring nature) necessary for a fair presentation of the financial
statements. The results of operations for the three and nine months
ended September 30, 2000 are not necessarily indicative of the
results to be expected for the full year.
(3) Deferred Revenue
During the quarter ended June 30, 2000, the Trust recognized the
remainder of the installment sale gain of $137,933 in accordance
with Financial Accounting Standards No. 66, Accounting for Sales
of Real Estate. Principal payments received through June 30, 2000
equal 25% of the sales value, which meets the requirement for the
full accrual method of recognizing profit from real estate sales.
Therefore, the Trust changed to the full accrual method and
recognized the remaining profit in income. The recognition of this
gain increased basic earnings per share of beneficial interest $.08
per share but has not tax effect for the Trust.
PAGE
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition
There have been no significant changes in the Trust's liquidity or financial condition since December 31, 1999 other than debt payments and dividend payments. At present, there are no large capital expenditures planned that would present a liquidity problem.
Results of Operations - Nine months ended September 30, 2000 compared to nine months ended September 30, 1999.
Net income for the nine months ended September 30, 2000 increased approximately 47% as compared to the same period in 1999. Rental income increased due to higher rental rates and additional rental properties.
During the quarter ended June 30, 2000, the Trust recognized the remainder of the installment sale gain of $137,933 in accordance with Financial Accounting Standards No. 66, Accounting for Sales of Real Estate. Principal payments received through June 30, 2000 equal 25% of the sales value, which meets the requirement for the full accrual method of recognizing profit from real estate sales. Therefore, the Trust changed to the full accrual method and recognized the remaining profit in income. The recognition of this gain increased basic earnings per share of beneficial interest $.08 per share but has no tax effect for the Trust.
Expenses related to real estate held for rental increased during the third quarter of 2000 compared to the third quarter of 1999 as a result of acquiring new property during the fourth quarter of 1999. For the nine months ended September 30, 1999, bad debts of $17,000 were written off, resulting in higher general and administrative expenses for that period compared to the nine months ended September 30, 2000.
PAGE
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings, other than ordinary routine litigation incidental to its business, to which the Trust is a party or to which any of its property is the subject.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit 27.1 Financial Data Schedule
B. Reports on Form 8-K: None.
PAGE
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PALMETTO REAL ESTATE TRUST
| November 1, 2000 | By: | /s/ Bill Franks |
| Date | Bill Franks | |
| Property Manager | ||
| (Principal Financial and Accounting Officer) | ||
| November 1, 2000 | By: | /s/ James A. Boling |
| Date | James A. Boling | |
| Chairman | ||
| (Principal Executive Officer) |
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